Amazon shares surge on Q2 sales beat as analysts highlight the strength of AWS, Prime and advertising

Amazon.com Inc. shares climbed more than 10% in premarket trading on Friday, boosted by the tech giant’s second-quarter sales beat and robust third-quarter guidance.After market close Thursday Amazon reported second-quarter sales of $121.2 billion, up from $113.08 billion in the year-ago quarter, and above Wall Street’s forecast of $119 billion.

See Now: Amazon stock jumps 14% as sales beat and AWS growth overcome a second straight quarterly loss Amazon improved its year-over-year cost pressures from $6 billion in the first quarter to $4 billion in the second quarter, with most of the improvement coming in productivity and staffing, according to Anmuth. The analyst also pointed to Amazon’s investments in AWS and Prime Video.

For the third-quarter Amazon gave revenue guidance of $125 billion to $130 billion. Analysts tracked by FactSet were forecasting revenue of $126.49 billion. The third quarter will also include sales from Prime Day earlier this month, which Amazon said established record sales. “We’re incrementally positive on AMZN post its beat & raise out of 2Q earnings, which reflects the power of Prime, whose value in this challenging environment continues to rise with 1-2 day free delivery, wide selection, and low prices,” he wrote. “Prime plus sustained growth in AWS and in the ads biz have helped AMZN thrive in the face of a weakening macro, which is all the more impressive considering AMZN control ~41% U.S. [ecommerce] share ,” he wrote.D.A.

“Despite inflationary pressures, a tight labor environment, and suboptimal fixed cost leverage, Amazon delivered strong second-quarter results that benefited from elevated levels of consumer demand and better optimization of its fulfillment network,” wrote Wedbush analyst Michael Pachter. “Longer-term, Amazon should benefit from steady margin expansion driven by the rapid growth of its cloud and advertisement businesses.

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